Which of the Following Statements Does NOT Represent a Positive

question 78

Multiple Choice

Which of the following statements does NOT represent a positive link between supply chain performance and the financial status of a firm?

• A) Lowering the cost of purchased materials reduces the level of working capital required and has a positive impact on the contribution margin.
• B) Reduced inventory levels result in an increase in the percentage of partial orders shipped and an increased inventory turnover ratio.
• C) Percentage of orders shipped on time reduces the level of working capital required and supports increased sales.
• D) Reducing supplier lead times reduces the level of working capital required.

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Definitions:

Average Inventory

The mean value of all inventory a company holds over a certain period of time, reflecting the average amount of stock available.

Carrying Cost

The total cost of holding inventory, including storage, insurance, depreciation, and opportunity costs, among others.

Order Cost

The expenses associated with placing and receiving orders for inventory, including costs related to processing, shipping, and handling.